Content Executive Summary Sector Overview Road Rail Air Cargo Shipping EXIM Logistics Warehousing 3PL IT in Supply Chain and Logistics Company Profiles – Listed and Un-listed 2This information is confidential and was prepared by Four-S solely for the use of our client; it is not to be relied on by any 3rd party without Four-S’s prior written consent.
Executive Summary A decade of opportunities lies ahead… Logistics and supply chain is a close to US$ XXXbn business (US$ XXXbn in 2010-11), amounting to XXX% of India’s nominal GDP. The references stating the sector is XXX% of India’s GDP are incorrect. The sector will grow in line with the GDP to reach a size of around US$ XXXbn by 2014-15, and US$ XXXbn by 2019-20. The sector will need, directly or indirectly, investment of around US$ XXXbn per annum in the 2011-20 period. We believe this indicates scope of greater PE investment in this sector. Amongst modes of transport, road is the biggest segment, with revenues of around US$ 56bn in 2010-11. While commodity trucking is not very attractive, profitable niches exist – like express, containerised cargo, and less than truck load. Private sector has struggled in rail, given difficult operating environment. However, given the strong growth potential of container transport, the sector is attractive over the long term. Air cargo and shipping maybe less attractive given the inability of Indian companies to compete with MNC majors here. Amongst business sectors, EXIM logistics, with a size of US$ XXXbn, and XXX% growth, the segment offers is the most attractive segment in logistics. Agri logistics has fast emerged as an area with attractive business economics. With the government intent of increasing private sector participation in agri value chain, this segment will attract new players. We find Indian manufacturing is ready for outsourcing logistics requirements, and demand for contract/3PL kind of logistics services should increase strongly. Leading logistics services are keenly targeting such business. 3This information is confidential and was prepared by Four-S solely for the use of our client; it is not to be relied on by any 3rd party without Four-S’s prior written consent.
Sector OverviewSector Size Exhibit 1: Size of Indian logistics and supply chain sector A bottom up calculation of various segments within logistics indicates that the sector had a size of around US$ XXXbn for 2010-11. Road transport at US$ XXX bn forms the biggest individual chunk. EXIM services is a large segment as well.Sector Growth Potential The sector will grow at a rate around XXX% over the next few years. Applying XXX% growth in 2015, and XXX% for the next 5 years, we get a size of US$ XXXbn for 2015 and US$ XXXbn for 2020. 2010-11 2014-15P 2019-20P 4This information is confidential and was prepared by Four-S solely for the use of our client; it is not to be relied on by any 3rd party without Four-S’s prior written consent.
Sector OverviewPE Investments in Logistics in 2011 Date Fund Company (%) ($ mn) There were 11 Private Equity investments in Jan-11 India Equity Company 1 XX XX logistics space in 2011. The disclosed Partners investment amount was US$ XXX mn, with Feb-11 Infrastructure India Plc Company 2 XX XX average disclosed deal size of US$ XXX mn. Mar-11 Infrastructure India Company 3 XX XX The biggest disclosed deal size was US$ Holdings Fund LLC XXX mn. Mar-11 Mayfield India and Company 4 XX XX The logistics funding was XXX% of funding Nexus Venture done in services sector and XXX% of total Partners Apr-11 Warburg Pincus Company 5 XX XX funding done in 2011. Apr-11 Fidelity Growth Company 6 XX XX Five deals happened in growth stage companies and the rest were equally Partners May-11 Mumbai Angels Company 7 XX XX May-11 India Agro Business Company 8 XX XX divided between the PIPE, early, and late Fund (IABF), IFC Stages. Most of the deals happened in the consortium first half of the year. Jun-11 IL&FS PE Company 9 XX XX Jul-11 Rajasthan VC Fund Company 10 XX XX Jul-11 Standard Company 11 XX XX Company Buyer Seller Invested Original Retur Exhibitered PE since Investmet ns(X) Source: Four-S Research $mn Company 1 Infra. India Guggenheim 2007 XX XX 2011 saw three successful exits equally Company 2 Warburg Pincus IL&FS NA XX XX divided between strategic sale and through the open market. Company 3 Warburg Pincus Aureos Capital NA XX XX Source: Four-S Research 5This information is confidential and was prepared by Four-S solely for the use of our client; it is not to be relied on by any 3rd party without Four-S’s prior written consent.
Road TransportThe dominant form of transportation business in India In terms of absolute numbers, the Planning Freight movement by road in India Commission projected that freight movement by road would reach a size of about XXX billion ton-kilometres (BTKM) by 2011–12. This is assuming an average GDP growth rate of 8% between 2007–08 and 2011–12. The Planning Commission has used a multiplier of XX between the GDP and 2000-01 2001-02 2002-03 2003-04 2004-05 2011-12P freight movement growth rates. Unit: Billion ton kilometres (BTKM) Source: Planning Commission, Four-S Research Size of Road Transport Sector Express General We expect road sector revenues to cross $XXXbn by 2020. We have projected the express segment to grow at XXX%, and the general cargo to grow at XXX%. 2011-12 2019-20 Unit: $bn, Source: Four-S Research, Industry 6This information is confidential and was prepared by Four-S solely for the use of our client; it is not to be relied on by any 3rd party without Four-S’s prior written consent.
Road Transport Growth Drivers The higher growth rate is for express is based on industry feedback, and the fact that the sectors express caters to, like consumer goods, computers, auto, pharmaceuticals are all high growth segments of the economy. Increasing penetration of modern trade, and changing supply chain practices among users is expected to drive higher growth for express compared to overall transport sector. In the Box: Case study of Express Transport Operator Competitive scenario The organized sector is a miniscule portion of the road transport sector. None of the large companies operating including XXX, XXX, XXX etc account for even 1% of sector revenues. Road transportation is a low entry barrier-business. There is a vast population of owner-driven trucks in India–drivers who have turned truckers. Investment Potential Value added road business has high potential to attract investments In the Box: Case study of investments in road transport companies •Revenue Mix •Growth •Margins •Investment Details 7This information is confidential and was prepared by Four-S solely for the use of our client; it is not to be relied on by any 3rd party without Four-S’s prior written consent.
Key Companies in the sector Top 20 Listed Logistics Companies Key Performance Metrics and RatiosCompany Market Cap Revenue PAT Gross Fixed Total EBITDA PAT Asset ROCE (%) ROE (%) Assets Assets Margin Margin turnover (%) (%) (x)Company 1 XXX XXX XXX XXX XXX XXX XXX XXX XXX XXXCompany 2 XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX.... …. …. …. …. …. …. …. …. …. ….Company 19 XXX XXX XXX XXX XXX XXX XXX XXX XXX XXXCompany 20 XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX Units: INR mn, data for latest financial year, Source: Ace Equity Analyser, Four-S Research Top 10 Global Logistics Companies Key Un-listed Companies in India Company Home Country Employees Countries Company 1 Germany XXX XXX About the company Company 2 USA XXX XXX Leadership Company 3 USA XXX XXX Business Lines Company 4 Germany XXX XXX Investment, M&A Activity Company 5 Switzerland XXX XXX Financials Company 6 Japan XXX XXX Growth Plans Company 7 China XXX XXX Company 8 France XXX XXX Company 9 USA XXX XXX Company 10 Netherlands XXX XXX Source: Four-S Research 8This information is confidential and was prepared by Four-S solely for the use of our client; it is not to be relied on by any 3rd party without Four-S’s prior written consent.
Companies Covered Listed Un-Listes Global CONCOR Safexpress Deutsche Post DHL Shipping Corp. of DARCL UPS Supply Chain India Allcargo Logistics Future Supply Chain Fedex Corp Solutions Great Eastern Radhakrishna DB Shenker Shipping Foodland Pvt Ltd Transport Corporation Sohan Lal Commodity Kunhe+Nagel of India Management Pvt. Ltd Essar Shipping Flywheel Logistics Nippon Express Blue Dart Express Total Logistics (India) Geodis Pvt. Ltd Great Offshore JICS Logistics CEVA ……and more Source: Four-S Research 9This information is confidential and was prepared by Four-S solely for the use of our client; it is not to be relied on by any 3rd party without Four-S’s prior written consent.
Thanks!The report presents current industry trends and snapshot of all key segments in Logistics & Supply ChainIndustry along with profiles of interesting listed and unlisted players in the space. The report is useful forBoard members & Senior Management of Logistics companies, PE Fund Managers and other investors. Tobook your copy, please write to Devendra Deole at firstname.lastname@example.org or call +91-22-4215 3659About Four-S ServicesFour-S Services provides customised business and financial research to organizations across the globe. The company alsoprovides Investor Relations consulting to corporates based on in-depth sectoral and company research. The company hasan impressive client profile and a team of analysts covering the key sectors including Finance & Banking, IT & Telecom,Retail, Media & Entertainment, Pharmaceuticals, Infrastructure and Manufacturing amongst others. For furtherinformation on the company please visit www.four-s.comDisclaimerThe information contained herein has been obtained from sources believed to be reliable but is not necessarily completeand its accuracy cannot be guaranteed. No representation, warranty, guarantee or undertaking, express or implied, ismade as to the fairness, accuracy or completeness of any information, projections or opinions contained in thisdocument or upon which any such projections or opinions have been based. Four-S Services Pvt. Ltd. will not accept anyliability whatsoever, with respect to the use of this document or its contents. This document has been distributed forinformation purposes only and does not constitute or form part of any offer or solicitation of any offer to buy or sell anysecurities. This document shall not form the basis of and should not be relied upon in connection with any contract orcommitment whatsoever. This document is not to be reported or copied or made available to others. The company mayfrom time to time solicit from, or perform consulting or other services for, any company mentioned in this document.